TLDR
- Bitcoin surged past $93,000 on Tuesday amid optimism over U.S.-China trade relations
- Treasury Secretary Scott Bessent called the tariff standoff with China “unsustainable” at a closed-door event
- President Trump stated U.S. tariffs on China “will come down substantially” from the current 145%
- Short traders suffered losses of over $500 million in liquidations in the past 24 hours
- Despite the price jump, on-chain data points to potential market fragility according to CryptoQuant
Bitcoin climbed above $93,000 on Tuesday, reaching its highest level since early March. The surge came after positive comments from U.S. officials about easing trade tensions with China sparked renewed optimism in crypto markets.
The largest cryptocurrency by market capitalization rose nearly 7% following remarks from Treasury Secretary Scott Bessent. At a closed-door JPMorgan event, Bessent reportedly told investors that the current tariff standoff with China was “unsustainable” and that de-escalation would come “in the very near future.”
President Trump later reinforced this view when speaking to reporters at the White House. He stated that U.S. tariffs on China “will come down substantially” from their current 145% level. This announcement helped ease concerns about an escalating trade war between the world’s two largest economies.
The crypto rally wasn’t limited to Bitcoin. The broader market also saw gains, with the CoinDesk 20 Index advancing 5.2% over a 24-hour period. Ethereum (ETH) rose 8% to trade above $1,700, while Dogecoin (DOGE) and Sui (SUI) gained 8.6% and 11.7%, respectively.
Market Liquidations Hit Short Sellers
The sudden price movement caused major losses for traders betting against the market. Over $581 million in futures positions were liquidated in 24 hours, with short traders bearing the brunt of the damage. Data from Coinglass shows that more than $504 million in short positions were wiped out as prices climbed.
While short-term holders continued to sell, data suggests long-term holders began accumulating Bitcoin again. According to CryptoQuant, the Net Position Change for long-term holdersâthose holding BTC for more than 155 daysâturned positive for the first time since the local peak.
This behavior hints at growing interest from experienced investors who may be positioning themselves for further upside. At the same time, short-term holders appear to be taking profits or cutting losses.
Traditional markets also responded positively to the trade news. The S&P 500 and the tech-heavy Nasdaq finished Tuesday’s session 2.5% and 2.7% higher, respectively. This parallel movement challenges recent speculation that Bitcoin was decoupling from U.S. stocks.
Caution Despite the Rally
Despite the price jump, not all market indicators point to sustained growth. On-chain data reveals potential weaknesses beneath the surface, according to analysts at CryptoQuant.
Bitcoin’s apparent demand has decreased by 146,000 BTC over the past 30 days. While this marks an improvement from March’s sharp drop, demand remains in negative territory. CryptoQuant’s demand momentum metric, which tracks new investor interest, has fallen to its most bearish level since October 2024.
Market liquidity also remains a concern. Using USDT’s market cap growth as a proxy for crypto liquidity, CryptoQuant noted growth of $2.9 billion over the past two monthsâbelow the 30-day average. Historically, Bitcoin rallies have coincided with USDT growth above $5 billion, a threshold not yet reached in the current cycle.
Technical factors present another challenge. Bitcoin is now facing resistance between $91,000 and $92,000 based on the “Trader’s On-chain Realized Price” metric. This level has often served as resistance during bearish market conditions.
QCP Capital analysts noted in a Telegram broadcast that “as capital rotates into safe-haven and inflation-hedging assets, BTC and gold are proving to be key beneficiaries of the exodus from USD risk.” They highlighted renewed inflows to spot U.S.-listed Bitcoin ETFs and the return of the Coinbase price premium as signs of institutional demand.
Bitcoin ETFs recorded over $381 million in net inflows on Monday, adding to Thursday’s $107 million, according to Farside Investors data. This continued interest from institutional investors could provide support for prices going forward.
President Trump also mentioned he has no intention of firing Federal Reserve Chair Jerome Powell. This statement came despite recent pressure on the Fed chair to lower interest rates, providing some stability to market expectations regarding monetary policy.
Gold, which had reached a record price of $3,500 during Tuesday’s trading, sharply reversed course and ended the day down 1%. This rotation suggests that some investors may have moved funds from precious metals into cryptocurrencies as the risk appetite improved.
The meme coin sector was among the strongest performers, jumping over 15% according to market data. AI and Real-world asset (RWA) sectors also posted strong gains as the positive sentiment spread across crypto categories.
Whether this rally marks the beginning of a sustained uptrend or merely a temporary bounce remains to be seen. For now, traders and investors appear cautiously optimistic about improved U.S.-China relations and what that might mean for risk assets like cryptocurrencies.
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